Singapore Branch Office
A foreign firm which is registered out of Singapore and conducts significant business operations in Singapore and makes business revenues on consistent basis should be registered as a Singapore Branch office under the Companies Act in Singapore.
The branch office is treated as the part of a foreign company and will not have a different legal identity. Two persons should be appointed by it who complies with authorities’ official notices and who are appointed as legal agents as Singapore Citizens for rendering official services. For tax treatment, company’s branch office shall be treated as non-resident company.
Features of Branch Office in Singapore
Requirements for registering a Branch of a Foreign Company
- Under the Companies Act, the minimum number of authorised representatives required is one.
- The branch of a foreign company must have at least one authorised representative who is ordinarily resident in Singapore.
- Being “ordinarily resident in Singapore” means the authorised representative’s usual place of residence is in Singapore. A Singapore Citizen, Singapore Permanent Resident or an EntrePass holder can be accepted as a person who is ordinarily resident here.
The Service Provider or Filing Agent is generally required to be provided with the following documents or information for submission to the Authority:
- Name and registered office of the foreign company in its place of incorporation
- Certified copy of the foreign company’s certificate of incorporation
- Certified copy of the foreign company’s constitution/charter/by-laws
- Notice of the foreign company’s registration number, business description and legal entity type
- Particulars of the foreign company’s directors
- Particulars of at least 1 Singapore resident who has been appointed to act as the branch company’s authorised representative
- Statement of consent from the branch company’s authorised representative who has consented to their appointment
- Particulars and opening hours of the branch office in Singapore
- The latest audited financial statements of the foreign company (if this is required under the laws of the place of incorporation)
- The application is usually processed within 15 minutes after the name application fee is paid.
- It may take between 14 days to 2 months if the application needs to be referred to another agency for approval or review.
- For example, if the intention of the branch of a foreign company is to carry out activities involving the setting up of a private school, the application will be referred to the Ministry of Education.
- The branch of a foreign company may commence business once it is registered with ACRA. This is on condition that the branch does not require any licences / approvals from other government agencies in order to carry out the business activities.
Company name reservation
- An approved company name will be reserved for 120 days from the date of name approval.
- No further extension of name reservation period is allowed by the authority.
- The directors, authorised representatives and other company officers may report an alternate address with the Registrar for a specified fee.
- The alternate address must be located in the same jurisdiction as the individual’s residential address.
- Therefore if the officer is locally resident, his alternate address cannot be a foreign address.
- The alternate address cannot be a P.O. Box address and must be an address where the person can be contacted.
Annual Filing for Foreign Companies
- Legal requirements for annual filing of accounts such as preparing a balance sheet and lodging audited accounts for branches of foreign companies.
Financial Reporting Obligations
Head Office Accounts
- All foreign companies, during their annual filing, are required to lodge their financial statements as well as those of their Singapore Branches with the Registrar. In relation to the lodgement of foreign companies’ financial statements:
a) if a foreign company is required by the law of its incorporation to table financial statements at an annual general meeting, and the financial statements are prepared using accounting standards similar to the Accounting Standards or are acceptable to the Registrar, the foreign company can lodge that set of financial statements with ACRA; and
b) in any other case, the foreign companies are required to prepare and lodge their financial statements prepared in accordance with the Accounting Standards unless they had obtained approval from the Registrar under section 373(13) of the Act for relief from requirements as to audit or form and content of the financial statements and other documents.
- There is no exemption for waiver from filing of a foreign company’s financial statements.
Singapore Branch Accounts
- All Singapore Branches are required to prepare audited profit and loss account which complies with the Accounting Standards and give a true and fair view of the profit or loss arising out of their operations in Singapore, and audited statement showing their assets used in and liabilities arising out of their operations in Singapore, and lodge these documents with ACRA, unless they have obtained approval from the Registrar under:
a) waiver from filling of the Singapore Branch accounts under section 373(12) or
b) relief from requirements as to audit or form and content of the documents under section 373(13)
Extension of time to file annual return or hold an AGM
- ACRA is prepared to grant a one-off extension of up to 2 months for a foreign company which is required to prepare Head Office financial statements under the laws of its place of incorporation or origin, but not required to table financial statements at an annual general meeting.
- The authorised representative(s) of the foreign company are to make the application within 6 months and 30 days from the financial year end of the foreign company.
- The application has to be submitted before the deadline of annual filing with applicable fees to the authority.
Closure or Cessation of Singapore Branch Office
A branch office can be closed by notifying ACRA if the foreign company has ceased to have a place of business, or carry on business in Singapore, within 7 days of such cessation. This includes situations where the foreign company has been dissolved or goes into liquidation in its place of incorporation or origin.
Alternatively, the authorised representative of the branch office may apply to ACRA for the branch office to be struck off the register in the following situations:
The sole authorised representative wishes to resign but is unable to because the foreign company has failed to respond or appoint a different authorised representative within 12 months from the date of his notice of resignation.
The sole authorised representative has requested for instructions on whether to close the branch office but the foreign office failed to provide such instructions within 12 months after the date of the request.
FAQ on Branch Office in Singapore
Who can hold shares in the branch office?
- Since a branch office is considered a simple extension of the foreign company, it does not have a separate set of shareholders. That means, in other words, the foreign company owns 100% of the Singapore branch office and there cannot be any other shareholders.
Do you need to come to Singapore to apply to set up a branch office?
- There is no need to come to Singapore to set up a branch office since all registration is done online. We offer incorporation services online or through email.
Do you need to come to Singapore to open Bank account for a Branch Office?
- You may need to visit Singapore to set up a corporate bank account since most banks in Singapore will require a physical presence with the company’s directors.
Is the Branch Office required to register for corporate tax?
- A branch office is automatically registered with the tax authority viz. Inland Revenue Authority of Singapore (IRAS) for corporate tax purposes upon registering with the regulatory authority viz. ACRA.
What is the corporate tax rate for Branch Offices?
- All types of companies including Branch Offices are subject to corporate tax rate of 17% on taxable income.
Is the Branch Office required to register for Goods & Services Tax (GST)?
- When the company’s taxable annual turnover exceeds SGD1 million, it is also subject to register for GST accordingly.
Can the profits of the branch office be repatriated to the foreign company?
- Singapore does not have any significant restrictions on remittances or capital movements i.e., flow of funds in and out of Singapore.
- Since the branch office is considered an extension of the foreign company, it is generally free to remit or reallocate profits and capital to the foreign company.
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